Methane Transparency and CNX Sustainability
Through our Radical Transparency program, we aim to lead the industry into a new era of responsible domestic energy development. Providing transparent data provides our families, neighbors, and the public at large a better understanding of the natural gas industry and its critical role in the environment and economy. Methane monitoring and our emission reduction program are consistent with our corporate values of Responsibility and Excellence, and our Sustainable Business Model. Our legacy of innovation and forward-thinking has kept us ahead of the curve on crucial issues such as methane emissions in our sector, region, and the world. Sustainability is central to our strategy for long-term value creation, and our low methane intensity and low-cost operations are part of our competitive moats, placing us on the left-hand side of the cost and carbon-intensity curves and positioning us for continued generation of regular and substantial free cash flow. The Appalachian Basin is the lowest methane emission intensity basin in the United States, and CNX is a leader in driving meaningful methane emission reductions in the basin. We have made significant reductions in methane emissions since 2020 and have aggressive goals to further reduce our intensity—even as we expand our operational footprint.
Emissions and Climate Change
COMMITMENT TO METHANE EMISSIONS REDUCTION
Natural gas is the catalyst for a more sustainable future. No fuel has contributed more to the United States’ leadership in emission reductions than natural gas. Replacing higher emitting fuels and imported LNG with resources produced safely in the Appalachian Basin is the best option for meeting growing energy demand while furthering environmental progress.
CNX operates exclusively within the Appalachian Basin.
CNX’s Emission Reduction Task Force (ERTF) consists of members from various operational, environmental, engineering, and data management teams and focuses on reduction of CNX’s methane emissions. The ERTF meets regularly to prioritize opportunities with the greatest potential to reduce CNX’s overall emission footprint.
From 2020 through the end of 2023, CNX produced 2.5 quadrillion BTUs of life-sustaining energy—enough equivalent energy to power nearly 8 million homes per year¹—while reducing operational methane intensity by 52% in our production segment, and by 31% in our gathering and boosting segment. These improvements were achieved primarily by controlling vented emissions from our pneumatic devices and by managing the emissions related to water handling during well completions and well liquid unloading events, which led to significant reductions.
In 2023, we allocated $7 million of capital investment to methane emission mitigation efforts. This capital was used to make changes to our pneumatic devices and our liquids unloading procedures, resulting in an annualized methane benefit of over 85,000 tons CO2e.
In 2024, we continued our methane emission mitigation efforts by spending $5 million on similar projects, in addition to mitigation efforts related to our dehydration units, with expected annualized benefits of over 85,000 tons CO2e. The resulting projected methane intensities will reinforce CNX’s position as a leader in the lowest emission basin in the United States.
In 2024, we expect to achieve annualized benefits of over 85,000 tons CO2e, resulting in methane intensities of approximately 0.02% or lower in both production and gathering and boosting segments. By the end of 2025, we maintain a targeted 200,000 tons CO2e reduction compared to our 2020 baseline.
Since 2021, executive compensation has been tied to annual methane intensity reduction targets through our long-term incentive program, explicitly linking pay to ESG performance. For the third straight year, CNX outperformed against these targets and—due to the strength of our team and their commitment to innovation and continuous improvement—we are confident that we can achieve our future milestone reduction goals by focusing on efficiency and utilizing new technology.
For the last four years, CNX has drastically reduced our methane intensity. This trend will continue in 2024, where our goals are to reduce both production and gathering and boosting segment methane intensities to approximately 0.02% or lower, resulting in reductions of approximately 71% and 43% respectively, since 2020.
- U.S. Energy Information Administration
Because of its high radiative efficiency compared to carbon dioxide, mitigating methane emissions and methane intensity in the oil and natural gas industry has been recognized as one of the best opportunities for reducing near-term global warming. The Inflation Reduction Act, passed by Congress in 2022, incentivizes methane emission reductions by creating a methane fee, which applies to oil and gas operators with methane intensity levels in excess of specified thresholds. CNX will be nearly 90% and 75% below the methane fee thresholds for the two industry segments that we operate within, thanks to our past and ongoing methane emission reduction efforts.
In addition to our operating methane emission reductions, CNX actively reduces methane emissions from other industries through our waste methane abatement initiatives. We capture approximately 9.1 million tons CO2e of waste methane annually, which is significantly more methane than we emit from our operating activities. This residual waste methane would otherwise be vented to the atmosphere during the mining process. Methane emissions from coal mining activities represent nearly 10% of all U.S. methane emissions. Rather than releasing it to the atmosphere, CNX captures, processes, compresses, and transports waste methane to market for beneficial use—one of only a handful of such projects in the nation.
For more information visit http://www.wastegascapture.com
CNX goes beyond regulatory requirements to drive improvements in our operating workflows, practices, and procedures in our production and midstream operations. Our leak detection and repair (LDAR) process utilizes proprietary software, developed in-house, to provide automated repair work order notifications and leak detection tracking. This process allows for timely repair of leaks well within regulatory requirements. We also aim for earlier and more effective detection of fugitive emissions and more expeditious mitigation of leaks at the source. CNX utilizes multiple early detection devices, including drone technology and OGI camera surveys, and continuous monitoring ground detection systems. A more complete description of our methane detection program can be found on our Radical Transparency program website.
CNX is a member of the Appalachian Methane Initiative (AMI), a coalition of leading U.S. natural gas companies, independent methane monitoring survey providers, technical consultants, and top-tier universities engaged in scientific analysis. The coalition aims to further enhance methane emissions monitoring and reductions throughout the Appalachian Basin through a cooperative approach and sharing of best practices. AMI’s 2024 campaign is expected to monitor more than 20,000 square miles of the Appalachian Basin, including gas production facilities representing 31.5 bcf/d of production capacity (roughly 90% of the daily production within the basin), approximately 6,000 oil and gas sites, and approximately 180 non-oil and gas sites, such as coal mines/vents and landfills.
1 South Station
The 1 South IP Station is the first intermediate pressure (IP) compressor station in CNX’s Virginia operations designed not only to be emissions free, but with a continuous emissions monitoring system. The Virginia team collaborated with Teledyne FLIR, installing three FLIR GF77a cameras in strategic areas for full coverage of the station. The cameras monitor for leaks of methane gas 24/7 and stream live video to the Virginia operation’s gas control room where operators can remotely shut down individual compressor units or the entire station if required. Pending continued favorable results, CNX plans to deploy FLIR cameras to other facilities.
CNX’s Emission Reduction Program Details
At CNX, we are committed to methane emissions reductions. Methane is the primary energy providing compound and salable component in the natural gas that we develop and produce. Our business focuses on capturing methane for sale and, like any other manufacturing business, we design our equipment and operational processes to minimize any product waste/leakage.
We work diligently to reduce methane emissions through innovative facility design, improvements in operational practices and procedures, advancements in detecting and measuring emissions, and improved accuracy in emissions reporting. We measure ourselves against the industry standards that are consistent with meeting the Paris Agreement: (1) the OGCI methane intensity target of being well below 0.2% by 2025; (2) the EPA WEC methane intensity thresholds of 0.2% and 0.05% for the onshore natural gas Production and Gathering & Boosting segments; and (3) the Global Methane Pledge initiative which targets to reduce absolute methane emissions by at least 30 percent from 2020 levels by 2030.
Since 2020, we drastically reduced our methane intensity in both segments of our business, meeting the OGCI target and coming in significantly below the EPA WEC thresholds. Our Production segment has been reduced by 52% during that time to an intensity of 0.03%, while the Gathering & Boosting segment has seen a 31% reduction to 0.02%.
Since 2020, CNX has also reduced its absolute annual methane emissions by 49% and 25% in its Production and Gathering and Boosting segments, respectively. On a company-wide basis, this equates to over 4,200 metric tons, or a 40% reduction to absolute annual emissions—doing our part to help the nation meet its 30% reduction target by 2030 under the Global Methane Pledge initiative.
In 2023, we allocated $7 million of capital investment to methane mitigation efforts. This capital was used to make changes to our pneumatic devices and our liquids unloading procedures that resulted in an annualized methane benefit of over 3,400 metric tons.
Pneumatic controllers and pumps
As noted in the Asset Inventory section below, pneumatic controllers and pumps make up the largest source category of our methane emitting equipment. These units can be found throughout our operations on well sites and compressor stations. Under the new EPA NSPS/EG regulations, all these units are required to eventually be replaced with zero-emitting units, or to capture and route the methane emissions from the units through a closed vent system to a process. The timing of when these new standards apply differs based on whether the facilities associated with the pneumatics are existing or have been recently constructed, modified, or reconstructed. Generally, for new facilities, the standards go into effect on May 7, 2025, and for existing facilities, an extended timeline for compliance is allowed. An exemption from the rule exists for pneumatics that are used for emergency shutdown (ESD) purposes.
At CNX, we have been voluntarily reducing the methane emissions from our pneumatic devices. Over the two-year period since the end of 2021, we have reduced the number of non-ESD pneumatic devices by nearly 70%. This has been one of the main drivers of the reductions we have seen in our methane intensity and overall methane emissions over the same period.
Liquids unloading from gas wells
The largest event-based source of methane emissions at CNX relates to situations where it is necessary to expel built-up water from a well bore to restore the productivity of the well. Under the new EPA NSPS/EG regulations, any well that unloads liquids must employ techniques or technology(ies) that minimize or eliminate venting of emissions during the event to the maximum extent.
Similar to the voluntary efforts we have taken with our pneumatic devices, CNX has also seen significant reductions that relate to voluntary measures taken with the management of our liquids unloading events. Specifically, we have focused on installing plunger lift assistance equipment in wells with a higher probability of liquids unloading events based on data we have collected on events in relation to the age of a well. The installation of the plungers allows for lower amounts of methane to be released during the event by decreasing the volume of the well bore to be vented and increasing the emissions efficiency of the operation through decreased event durations.
The chart below shows the deployment of the plungers over the population of our major producing unconventional shale well inventory based on the year the well was completed and began delivering gas to sales. The management of these events is another prominent contributor to the methane intensity and overall methane emission reductions we have generated over the past several years.
2024 plan
In 2024, we continued our methane mitigation efforts by spending an additional $5 million on projects similar to those we supported in 2023 in addition to mitigation efforts related to our dehydration units, with expected annualized absolute methane emission benefits of over 3,400 metric tons. We also expect these plans to lower our methane intensities to approximately 0.02% or lower in both our Production and Gathering & Boosting segments by the end of 2024. In addition, we made further efforts to:
- Continue routine leak monitoring at all well sites and compressor stations
- Eliminate or minimize emissions from common pieces of equipment used in our operations such as process controllers, pumps, and storage tanks
- Monitor flares and other combustion control devices during routine leaks monitoring surveys, ensuring that these control devices are operating properly on a continuous basis
- Reduce storage vessels (tanks) emissions by 95%
- Use best management practices to minimize or eliminate venting of emissions from gas well liquids unloading
CNX Methane Emissions Asset Inventory
CNX calculates its methane emissions according to the reporting methodologies under the EPA’s Greenhouse Gas Reporting Program (GHGRP) for Petroleum and Natural Gas Systems (subpart W). Current calculation methods can be grouped into five categories: 1) direct emissions measurements; 2) combination of measurement and engineering calculations; 3) engineering calculations; 4) leak detection and use of a leaker emission factor; and 5) population count and population emission factors. EPA developed these emission factors from published empirical data and CNX combines them with site-specific data from our operations. We maintain an inventory of the equipment and/or events that generate methane emissions from our physical locations (sites). Providing transparency around the details of our methane emission sources is fundamental to the credibility of our reported results.
CNX operates within the Production and Gathering and Boosting segments of the natural gas industry. Our operational footprint spans across the Appalachian Basin in parts of Pennsylvania, Ohio, West Virginia, and Virginia. The following tables and charts provide transparency to our reported methane emissions.
The first table shows the number of physical locations where we conduct our operations for each respective industry segment and state. The pie chart next to this table shows the split of our 2023 methane emissions between these two industry segments. Emissions from our Production segment were slightly more than half of total company emissions, with the majority from this segment coming from the multi-well sites that we operate in Pennsylvania. For the Gathering & Boosting segment, the gathering compressor stations are the primary emitting sites, led by the larger stations, which are also located in Pennsylvania.
The second table shows the counts of major sources of methane emitting equipment we had in service at the end of 2023 and the number of major event-driven sources of methane emissions we had during the year. Next to the table is a chart that shows the percentage contribution for each of the sources during 2023.
The following section lists key definitions used in the above methane emissions asset inventory. (Source: EPA Regulatory Impact Analysis of the Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources: Oil and Natural Gas Sector Climate Review.)
Emissions Monitoring
Leak Detection and Repair Program
CNX’s leak detection and repair (LDAR) program is designed to mitigate methane emissions related to unintended releases. Its effectiveness is based on how accurately we can identify the source and limit the duration of a leak. Optimal identification requires frequent deployment of leak detection technology across all potential sources, while limiting duration is measured by (1) how quickly new leaks can be found and (2) how quickly the leak is repaired after it is found. The following set of slides will be refreshed monthly with current data to provide transparency around the effectiveness of our LDAR program. The Leak Details slide provides all the significant information that we collect for each of the leaks we find and allows the user to see this data in tabular form by right clicking the chart.
CNX currently deploys the following site surveying techniques to monitor for leaks:
- Ground-based component-level surveys with handheld optical gas imaging (OGI) cameras
- Aerial flyover surveys with remote gas sensing technology fixated to aircraft
- Ground-based continuous stationary monitoring systems.
OGI surveys
As prescribed by EPA regulations, we conduct quarterly leak detection surveys with an OGI camera at all major CNX well sites and compressor stations. Additionally, we voluntarily conduct quarterly OGI surveys across sites that have less frequent requirements. These surveys cover any component on the site that has the potential to emit fugitive emissions of methane, such as valves, connectors, pressure relief devices, open-ended lines, flanges, covers and closed vent systems, thief hatches or other openings on a storage vessel, compressors, instruments, meters, and yard piping.
If a leak is detected during the survey, we utilize proprietary software, developed in-house, to provide automated repair work order notifications and leak detection tracking. This process allows for timely repair of leaks well within regulatory requirements.
Advanced Methane Detection Surveys
We complement our regulatorily required OGI surveys with multiple detection technologies in combination with one another to focus and optimize our methane mitigation efforts. These alternative advanced methane detection surveys range from aerial flyovers using remote sensing technology that screen hundreds of sites in a single deployment, to on-site sensor networks that deliver continuous real-time monitoring.
We perform quarterly aerial flyovers of our operating areas through our membership in the Appalachia Methane Initiative (AMI), which is a proactive, first-of-its-kind basin-wide initiative designed to further enhance methane emissions monitoring and, ultimately, facilitate additional methane emissions reductions in the Appalachian Basin.
We utilize Bridger Photonics and ChampionX for methane surveys, SLR International for strategic consulting, and the Energy Emissions Modeling and Data Lab—a consortium at University of Texas at Austin that also includes Colorado State University and the Colorado School of Mines—to lead the scientific analysis.
As part of the AMI 2024 flight campaign, 229 of our major Production and Gathering & Boosting sites were surveyed on a quarterly basis. By leveraging coordinated aerial surveys alongside on-site monitoring technology, advanced reporting frameworks, and operational data, we are able to detect and determine the causes of various methane emissions.
CNX has Project Canary ground monitoring sensors at our Richhill production facilities that represent nearly one third of the gas we sell to market. Project Canary delivers auditable and verifiable environmental attributes for Responsibly Sourced Gas and publishes those results to a registry that offers transparency to stakeholders. We have received Project Canary’s highest rating (platinum) for those sites. Obtaining the platinum level rating entails undergoing an environmental assessment, utilizing continuous monitoring technology, and quantification of methane emissions intensity.
In addition to the Project Canary sensors that we have been using for two years, CNX is adding fixed methane monitoring cameras at all of our Radical Transparency program sites. These cameras are provided by CleanConnect.ai who provides visual automation for oil and gas, including gas leak detections and methane measurement.
For these supplemental surveying techniques, we have developed a process where we investigate all methane detections. Any detection that is determined to be a leak is logged into our LDAR program where it is tracked to timely repair. For methane detections that are from normal operational releases, we collect all relevant quantification information and reconcile to the methodologies used for our emission reporting obligations.